Is the Brick and Mortar Insurance Agency Model Dead?

Is the Brick and Mortar Insurance Agency Model Dead?

June 09, 2021
Share |

If you believe the headlines and the hype, you may think that the brick and mortar insurance agency model is dead or quickly dying. As we’ve explored in recent posts, however, the data doesn’t back up those over exaggerated claims. In fact,
Marck McElroy, Executive VP of the Insurance Business Unit for TransUnion points out that:

“We are finding that despite billions of dollars being spent on advertising each year, the percentage of consumers shopping for auto insurance has been dropping for approximately the last several years.”

This is surprising, in an industry where there is a common misconception that ecommerce is a huge and ever present threat to brick and mortar agencies across the country. A lot of this is attributable to the exaggeration and bias we see in reporting and headlines
. This is especially true in the case of technology news. Although,

Consumers are still showing a preference for brick and mortar stores. We hypothesized in an earlier post that comparison shoppers are using the online comparison tools to find the best available prices online and then going to their local agents to either purchase the policies or try to negotiate a better deal. The numbers support this. The percentage of consumers that actually purchase policies online is always substantially lower than the percentage of consumers who shop online or get a quote. Experts point out that the great majority of consumers (60%) still don’t like to make online purchases and they tend to use online comparison as a tool in the discovery phase of their shopping.

So the answer? It’s a resounding NO. The Brick and Mortar Agency Model is alive and well and will be for a long time to come. In spite of all the hype, ecommerce has a very long road ahead if it ever hopes to replace brick and mortar agencies as the preferred insurance buying channel.